Leidos says coronavirus lowered quarterly sales by about $50 million

Leidos said the ongoing coronavirus outbreak reduced the company's sales during its most recent quarter by about $50 million.

During a call with analysts this morning, Roger Krone, Leidos' chief executive, said the contractor has taken a number of steps to cope with the crisis. The company's board of directors has reduced its pay, which is being donated -- along with Krone's salary during the pandemic -- to the Leidos Relief Foundation to support affected company employees. Leidos has reduced discretionary spending, put in place a hiring freeze for non-essential positions and furloughed some workers in what Krone described as "minor areas" that have experienced "reduced business volumes."

Krone said the company has identified about $270 million – or about 2% -- in 2020 sales that it expects to be affected by COVID-19. However, the company expects to recover much of it in 2021.

He told analysts he thinks the toughest period is over.

"April must be the worst month, given what we all have been through," Krone said. "We think that May will be better and June will be even better."

Meanwhile, Leidos reported today sales in its defense solutions group totaled $1.7 billion, up 14% from the same three-month period a year earlier. The company attributed the growth to "the acquisition of Dynetics, program wins, a net increase in program volumes and higher net profit write-ups in the current quarter."

"This was partially offset by the completion of certain contracts and temporary reductions in some parts of the business due to the impacts of COVID-19," Leidos added.